Should you go into network marketing?
By Carlos Gonzales
MoneySense
First Posted 10:13:00 03/31/2008
CALL it direct sales, network marketing, or multi-level marketing (MLM), there are around two million Filipinos currently in this business, according to the Direct Selling Association of the Philippines (DSAP). And a lot more have been scammed by pyramiding schemes disguised as network marketing. If you’re curious about becoming a direct seller or have been invited to a “business opportunity,” take these steps before you plunge in:
1. Figure out if you fit the profile
There are probably millions more who have tried their hand at the MLM business at one time or another. Not many succeed, usually dropping after a few months. It may be easy to join but it’s certainly difficult to stay for long. You need to have a certain mindset to succeed in network marketing. “If you are not inclined to do business or not entrepreneurial then I think MLM is not for you,” says Daisy Reyes, an actress and a top seller for China-based Winalite International, which distributes Love Moon Anion sanitary napkins.
2. Choose the right company
Daisy, who mentions this is her first foray into direct selling, advises that it’s important to choose the right product and the right company. “Somewhere along the line, you will find one that will fit your personality,” she adds.
Investigate the company. It should have a long and proven track record in the industry it operates. Winalite for instance has been in the sanitary napkin business for years, but it is only recently that it adopted the MLM sales model, Daisy explains. Companies like Avon, Triumph, Tupperware, and NuSkin have been in the industry for years and have been providing people with good products as well as good income for its distributors. Many are Fortune 500 companies.
3. See if you like the products
The most successful network marketers are those who truly believe in the products they are selling. It certainly makes it easy to persuade other people if you love to use the products yourself. “Some sell investment packages, some health supplements, while us, we sell personal care and sanitary products. I’m sure there will be a product that you will definitely need and want and would recommend to a friend. That’s what MLM is all about,” Daisy says.
When done right and with the right products and with the right company, MLM offers sustainable and long-term passive income. Daisy adds, “As long as people will use your products and the company develops new ones then sustainability is possible. Some MLMs are recruitment-based. If the products are not good, the business will stop.”
In her case, she was sold on the benefits of the Anion sanitary napkins. “I believe a superior product will definitely move. Just let your friends see the demo and it will speak for itself. I don’t like forcing people into buying anything,” she says.
4. Make sure you earn not mainly from recruiting
Daisy explains, “One, the company should have a product. Scams like FrancSwiss offer huge interest for your investment and yet they don’t have a product. Two, the product should be unique and is exclusively made by the company. If not, then most likely, the business is being run from joining fees.”
She says she earns only from selling the products as there are no membership fees. “The bulk of the business is based on product usage. The system encourages the distributors to find people to use it long-term. We don’t just want to sell the products and earn one time. We want to get people to use it long-term and in turn get these same people to get other people to use it long-term as well,” she explains.
(This article is from MoneySense, the country’s first and only personal finance magazine. Visit www.moneysense.com.ph for more.)
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